4 years
Yes. At maturity you get the final coupon payment in addition to the return of principal.
1)bond issue 2)coupon payment 3)bond maturity
The coupon rate is the actually stated interest rate. This is the rate earned on a NEW issue bond. The yield to maturity takes into consideration the purchase price of a bond bought in the secondary market. For example, if you buy a $1,000 bond for $1100 which matures in 10 years and has a coupon of 5%, your coupon is 5%, but your yield to maturity would be closer to 4% because you paid $1100, but will only get back $1,000 at maturity (losing $100). The "loss" reduces the return.
bond price= 78/2[(1-(1+0.086/2)-11/2)/(0.086/2)]+ 1000/(1+0.086)11/2=
The bond's price is $996.76. The YTM is 8.21%. by E. Sanchez
You would need to know a Yield To Maturity to answer this question.
Coupon payment = (100)(.035) = 3.5 PV coupon payments payments = $56.56 PV of bond = 3.34 Present value of bond = 56.56 + 3.34 = $59.90
Yield usually refers to yield to maturity. If a bond is trading at par it usually means the yield to maturity is equal to the coupon.
9.28
4 years
Yes. At maturity you get the final coupon payment in addition to the return of principal.
Using TI84plus got R=7.43 (aprox) YTM=2*7.43% YTM=14.86%
A zero-coupon note is a note which pays at maturity the value of the note with no separate interest payments.
1)bond issue 2)coupon payment 3)bond maturity
The coupon rate is the actually stated interest rate. This is the rate earned on a NEW issue bond. The yield to maturity takes into consideration the purchase price of a bond bought in the secondary market. For example, if you buy a $1,000 bond for $1100 which matures in 10 years and has a coupon of 5%, your coupon is 5%, but your yield to maturity would be closer to 4% because you paid $1100, but will only get back $1,000 at maturity (losing $100). The "loss" reduces the return.
Coupons, face amount, maturity value and maturity rate all are associated with bonds. Coupons are a type of bond and the face amount tells how much the coupon is worth until it matures, gaining interest.